Correlation Between Agnico Eagle and Newcore Gold
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and Newcore Gold at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Agnico Eagle and Newcore Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agnico Eagle Mines and Newcore Gold, you can compare the effects of market volatilities on Agnico Eagle and Newcore Gold and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Agnico Eagle with a short position of Newcore Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and Newcore Gold.
Diversification Opportunities for Agnico Eagle and Newcore Gold
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agnico and Newcore is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Newcore Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newcore Gold and Agnico Eagle is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Agnico Eagle Mines are associated (or correlated) with Newcore Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newcore Gold has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Newcore Gold go up and down completely randomly.
Pair Corralation between Agnico Eagle and Newcore Gold
Considering the 90-day investment horizon Agnico Eagle Mines is expected to generate 0.52 times more return on investment than Newcore Gold. However, Agnico Eagle Mines is 1.93 times less risky than Newcore Gold. It trades about -0.05 of its potential returns per unit of risk. Newcore Gold is currently generating about -0.1 per unit of risk. If you would invest 8,688 in Agnico Eagle Mines on August 26, 2024 and sell it today you would lose (258.00) from holding Agnico Eagle Mines or give up 2.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agnico Eagle Mines vs. Newcore Gold
Performance |
| Timeline |
| Agnico Eagle Mines |
| Newcore Gold |
Agnico Eagle and Newcore Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and Newcore Gold
The main advantage of trading using opposite Agnico Eagle and Newcore Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, Newcore Gold can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Newcore Gold will offset losses from the drop in Newcore Gold's long position.The idea behind Agnico Eagle Mines and Newcore Gold pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Newcore Gold vs. Aurion Resources | Newcore Gold vs. Liberty Gold Corp | Newcore Gold vs. Orezone Gold Corp | Newcore Gold vs. Radisson Mining Resources |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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